«United States Steel: Корпорация с душой»

Хотя Фаррелл больше не руководит непосредственно управлением Steel Products Co., он по-прежнему питает живой и личный интерес ко всему, что касается устройства того внешнеторгового бизнеса, в возведение которого он внес столь существенный вклад. Он находится в тесном и постоянном контакте со всей его экспортной деятельностью и держит себя в курсе событий, затрагивающих мировую торговлю сталью, столь же обстоятельно, как и тогда, когда все его время было посвящено исключительно этой стороне бизнеса.

Спокойный и скромный, Фаррелл пользуется репутацией человека основательного и эффективного. Он целиком и полностью отдается работе, демонстрируя абсолютную преданность и неутомимую энергию. Однажды его охарактеризовали как «человека, который никогда не отдыхал», и для такой характеристики были основания. В периоды напряженной работы его рабочий день длится четырнадцать часов или более. Но у него великолепное телосложение и конституция, по-видимому, сделанная из той самой стали, которой он торгует.

С первого взгляда Фаррелл производит на наблюдателя впечатление «чистого бизнеса». Его манеры наводят на мысль о нетерпимости к пустой трате времени или слов, и он редко позволяет себе даже ненужный жест. Внешне он олицетворяет собой холодного, сентиментального лишенного, даже жесткого делового человека. Но его облик обманчив, ибо, если кому-то посчастливится заглянуть под поверхность, перед ним предстанет человек широких симпатий, исключительной тонкости и такта.

На посту главы Steel Products Co. Фаррелла сменил Юджин П. Томас, который с 1906 года помогал ему строить мировой бизнес этой компании. Томас родился в Атланте, штат Джорджия, 11 мая 1876 года. Он начинал как газетчик, но после непродолжительной работы по этой специальности пришел в сталелитейную торговлю. Он был одним из пионеров внешней торговли сталью, отправившись в Англию в качестве коммивояжера компании Lorain Steel, с которой тогда сотрудничал, в 1899 году. Не достигнув и тридцати пяти лет, он возглавил крупнейшую экспортную организацию в Соединенных Штатах.

Как уже объяснялось, до создания «Юнайтед Стейтс Стил» американские производители стали не предпринимали никаких систематических или последовательных усилий для завоевания внешней торговли. Те кампании по выходу на мировой рынок, что предпринимались, как правило, проводились не так, чтобы создать сталелитейщикам этой страны хорошую репутацию за рубежом. Жители стран — потребителей стали (в отличие от тех, кто производил собственную сталь) предпочитали иметь дело с германскими, британскими или бельгийскими заводами, и на то были очевидные причины.

Великие сталелитейные державы Старого Света в нормальных мирных условиях не способны потреблять более сравнительно небольшой доли выпуска своих заводов; внутреннее потребление невелико. Следовательно, экспорт большей части производимой ими стали является насущной необходимостью, и они не жалеют усилий для обеспечения зарубежных рынков сбыта своей продукции, для культивирования благожелательного отношения к себе по всему миру.

С другой стороны, сталелитейщик Соединенных Штатов всегда имел, за исключением периодов тяжелых спадов, отличный внутренний рынок, находившийся под рукой и способный поглотить всю выпускаемую им сталь. Страна строилась и расширялась. Сталь была и остается необходимой для железных дорог, небоскребов, мостов, фабричных зданий, сельскохозяйственных машин, автомобилей и тысячи других целей. В результате у наших производителей в нормальные времена не было особого желания искать зарубежный бизнес со всеми сопутствующими рисками, расходами и требованиями долгосрочного кредитования. До недавних лет они довольствовались тем, что оставляли внешние рынки на откуп европейской экспансии, и выходили на эти рынки лишь тогда, когда падение деловой активности внутри страны вынуждало их искать новые пути сбыта продукции. В более ранние дни существования отрасли американская сталь в такие периоды выбрасывалась на зарубежные рынки по ценам, часто ниже себестоимости, причем убытки считались предпочтительнее безработицы дома или разрушения структуры компаний, к которому привело бы непрерывное падение продаж. Этот процесс обычно назывался «демпингом» и был рассчитан на то, чтобы навлечь на себя яростную враждебность зарубежных конкурентов, видевших, как их тщательно возделываемые рынки отнимаются за счет беспощадной конкуренции. Волна возвращающегося внутреннего процветания заставляла наших производителей стали пренебрегать внешней торговлей и чувствовать себя независимо от нее — позиция, которая, естественно, не способствовала формированию доброй воли среди зарубежных потребителей. Одним из результатов такого положения дел стал неравномерный и спорадический экспорт; другим — то, что у американской стали не было друзей за рубежом.

Наших производителей часто обвиняли в том, что, заявляя о своем стремлении продавать товары на любых рынках, они не желали считаться с требованиями зарубежного покупателя, придерживаясь принципа «не нравится наш товар — пусть идут в другое место». К счастью, сегодня это далеко не так актуально, как каких-то несколько лет назад, но подобный настрой все еще заметен во многих кругах. И это дает европейскому конкуренту, который исходит из принципа «покупатель всегда прав», неоценимое преимущество. Основа такого подхода наших производителей кроется в их уверенности в огромных внутренних рынках. Его же зарубежный конкурент, вынужденный продавать половину или более своего объема не на внутреннем рынке, естественно, трудится над тем, чтобы выяснить потребности потенциальных покупателей по всему миру, и ставит целью удовлетворить эти потребности. И он получает этот бизнес.

Но Сталелитейная корпорация, раз и навсегда решив построить постоянный экспортный бизнес, приняла и усвоила подход своих европейских конкурентов: потребитель, где бы он ни находился, должен получать свои товары так, как он этого хочет, а не так, как производителю заблагорассудится их изготавливать. Для этого потребовалось начать производство ряда новых разновидностей стали, на которые не было спроса на внутренних рынках, применять веса и меры каждой страны при расчетах с таможенными покупателями и всячески облегчать для зарубежного покупателя оформление заказа у Корпорации с уверенностью, что его сделка получит такой же радушный прием, как и на британском, немецком или бельгийском заводе, а также ту же заботу и внимание. Чтобы угодить запросам различных обслуживаемых зарубежных покупателей, в некоторых случаях находилось необходимым выделять целые заводы исключительно под выпуск экспортной продукции.

Проволочные изделия составляют важную статью экспорта, и из одиннадцати с лишним тысяч разновидностей проволочной продукции, выпускаемой American Steel & Wire Co., около 1 800 производятся специально для внешней торговли, причем многие из этих линий вообще не продаются в Соединенных Штатах.

Например, расположенные южнее экватора страны Южной Америки требуют так называемую «лакированную» проволоку; некоторые тропические страны из-за климатических условий нуждаются в проволоке с тяжелым цинковым покрытием для противостояния ржавчине; и так далее. Австралийский плотник привык скреплять деревянные детали гвоздями овального сечения. Никакие аргументы не могут убедить его в том, что круглый гвоздь, популярный в Америке, ничуть не хуже. Он знает, чего хочет, а также знает, что если Соединенные Штаты не поставят это, то Европа — поставит. В других частях света популярен квадратный гвоздь. Поэтому Корпорация производит овальные гвозди, квадратные гвозди — по сути, гвозди на любой климат и для любой страны. Она не пытается спорить о вкусах, она просто принимает их такими, какие они есть, и стремится удовлетворить их — и это царский путь к продажам и прибыли.

Even in the question of packing, local usage must be considered. In the United States, the standard package for nails is the 100 lb. keg. For the Japanese trade, picul kegs, holding approximately 133 lbs., are demanded, while the Hindu trader, sitting bare legged and beturbaned before his booth in the bazaars of Bombay or Calcutta, offers the passer-by small packages of nails weighing seven pounds—put up by the American Steel & Wire Co.

It was a big job that Farrell had handed to him when he was put in charge of the exploitation of foreign markets for the Steel Corporation. For not only did the varying conditions affecting sales in the different parts of the world have to be studied and plans laid to adopt manufacturing methods to meet these conditions, but there were other obstacles to contend with, handicaps, by the way, which it would hardly have been possible to overcome without the backing of the power and prestige of the greatest of corporations.

One was the question of prices. The high wages paid to American labor as compared with labor compensation in Great Britain, Germany, or Belgium, combined with the fact that these countries lent every assistance to their manufacturers in increasing their world business—particularly Germany, which encouraged the artificial keeping up of home prices and the reduction of export prices, with the object of extending the nation’s foreign commerce—rendered it impossible for American manufacturers to obtain as profitable a price in competition with Europe as they did in the domestic field. Further, as the Corporation entered many markets to find foreign competitors already firmly established therein, it was necessary to offer buyers material price concessions to get business at all in the first place.

Such price cuts were nearly always essential to give the Steel Products Company its first foothold in the desired markets, to force the entering wedge. The fact that the Corporation has at times sold abroad cheaper than at home has been used as a weapon against it by its critics. Apart from the fact that its doing so afforded labor to many American workers and thus reduced unemployment, it seems plain that a seller must make his price to suit the market in which he is operating, that had such price concessions not been made the Steel Corporation’s export business would never have shown the remarkable growth it has. Europe would have undersold it in all markets. However, the Corporation refused to follow anything like the old dumping policy, often refusing otherwise very desirable business on the single issue of price.

James A. Farrell

Besides the preference, natural on the part of the buyers, for well-known and long-established goods and the close connection of foreign manufacturers antagonistic to a new competitor in the field, the Corporation had other difficulties to overcome. These included banking facilities in the various countries opposed to business with America; cheaper freights and better steamship accommodations in foreign ports than were available from the United States; preferential duties, and so on.

Transporting 222 Tons of Bridge Material in China

For years the Steel Products Co. consistently contended against these obstacles, gradually introducing its products into one market after the other, until it eventually attained the point where the quality of the goods it sold was recognized and business could be secured without concessions in price from the levels charged by European competitors.

Although in its effort to gain a foothold in foreign markets the Corporation was compelled to offer steel, at first, below domestic prices, this condition did not continue as long as is generally believed. For many years prior to the outbreak of the war prices secured on foreign business were practically the same as those obtained on domestic, more in the case of some products, less in others. In 1911, for instance, the average mill price received by the Corporation on rails exported was $27.32 compared with $28.00 in the home trade. Rail exports for the year were valued at $11,377,000. A concession of 68 cents a ton does not seem extravagant in view of the large volume of business obtained. In 1918 average price realized for nails for export were $17.49 a ton, and in 1919 $10.02 a ton, higher than the average received on domestic shipments.

The European war, of course, changed the export situation for the time being completely. The British navy stood between Germany, the largest exporter, and her foreign markets. Belgium’s mills were seized and in some cases destroyed by the invading Hun. England, of necessity, had to turn the mass of her steel output into shells, guns, and other war materials. There was but one country that could supply the hungry world with steel—the United States. And to it every consumer turned.

From almost complete indifference the American steel trade turned to enthusiasm regarding foreign business. Steel export companies sprung up like mushrooms anywhere and everywhere. So great was the need of foreign buyers of steel, that any one, with or without capital, could become a broker in the metal, and was sure of getting all the buying business he could handle. The trouble was to get the steel.

Most of the export firms and corporations that sprung up at this period will eventually disappear. Many of them have already done so. But there are a number, backed by conservative and financially strong interests, that are in the business to stay, and practically every American steel manufacturer, either directly or through one of these agencies, to-day exports part of his product and expects to continue to do so. The steel trade at large now realizes, what the Corporation did from the beginning, that a permanent export business is of major importance in assuring stability in trade conditions.

How much of the export trade secured during the war years can be held permanently is entirely a question of opinion. Undoubtedly, Great Britain and Germany will strain every effort, when they get over their present difficulties, to regain the business they lost to us between 1914 and 1918. They are already starting to compete. And France, having recovered the vast ore deposits of Lorraine, may become a steel exporter, too. On the other hand, some authorities are of the opinion that manufacturing costs of steel in England and Germany at the time this is written are higher than in the United States, and that the European producer will never regain the advantage of low labor costs he once enjoyed. Time alone will settle these questions. But with the steel trade of the United States as a whole devoting its energies to cultivating and holding foreign markets the probabilities are that at least a substantial portion of the gain in exports shown in the war period will be maintained indefinitely.

The Steel Products Company has not sought merely to increase the gross tonnage of its business. In the years preceding the organization of the Steel Corporation the steel exports of this country consisted very largely of the cruder and less profitable materials, particularly iron ore, pig iron, billets, and steel bars. It will readily be seen that the most important business is that which shows the greatest profit, that in finished rather than in raw or semi-finished material, the finished product meaning not alone larger profits to the shipper, but more employment and a higher rate of remuneration to labor. The higher degree of finish to the products manufactured the greater the wages paid to the worker. In exporting iron ore, pig iron, scrap and cast iron, only the cheapest materials are involved, the lowest paid labor engaged. It is a question whether such exports, particularly those of iron ore and pig iron, are of any real benefit to the country as they involve the sacrifice of natural resources usually at such unremunerative prices that from the standpoint of conservation it might appear wiser, to economists, to withhold these reserves for domestic rather than foreign consumption. And the policy of the Corporation in developing its world trade has been in harmony with this thought; its efforts have been consistently to decrease the volume of its foreign sales of the less-worked-up materials and to increase sales of the more highly finished products.

As may be supposed, conditions brought about by the war changed the situation materially, hence, figures illustrating the policy of the Corporation to develop exports more along the line of finished materials must be sought in the pre-war period. In 1912, the record pre-war export year, the Corporation shipped abroad 2,223,536 tons of finished steel products and only 42,031 tons of pig iron, ingots, and scrap. In the year 1904, immediately following the organization of the export company, foreign shipments were 1,002,967 tons of a gross value of $31,388,139, an average of $31.30 a ton. These figures are f. o. b. on the seaboard. In 1912 the tonnage exported was 2,265,567 of an average value of $40.60 a ton or a total value of $91,984,239. In the period indicated there had been an increase of 125.9 per cent. in tonnage, of 193.1 per cent. in total value, and of 29.7 per cent. in the average price, more than $9.00 a ton. Incidentally, the average price received on domestic business by the Corporation declined from $41.34 a ton in 1904 to $36.53 a ton in 1912, or nearly $5.00 a ton.

Part of the gain in export prices during the period in question was due to the increasing percentage of more highly finished goods in total export shipments and part to the fact that the Corporation’s products were becoming more established in world markets and were getting the confidence of buyers therein.

How important has been the part played by the U. S. Steel Corporation, through the Steel Products Co., in developing the iron and steel exports of this country, is shown in the table below. Tonnages given for the United States include only iron and steel exports proper, and not machinery and other articles not manufactured by the Corporation, or scrap sheet and iron:

YEAR UNITED STATES

GROSS TONS U. S. STEEL

CORPORATION

GROSS TONS

1904 1,139,519 1,002,967

1905 1,002,289 939,517

1906 1,314,444 1,123,545

1907 1,276,292 982,084

1908 942,409 765,947

1909 1,218,225 1,000,395

1910 1,509,864 1,270,599

1911 2,102,014 1,712,877

1912 2,826,576 2,265,567

1913 2,640,142 1,797,948

1914 1,512,848 1,108,483

1915 3,450,783 2,355,858

1916 5,885,948 2,463,922

1917 6,268,514 2,229,747

1918 5,341,360 1,648,160

1919 4,354,086 2,004,190

1920 4,925,000 (est.) 1,645,192

Between 1904 and 1912 the Corporation’s exports increased 1,262,600 tons, and the exports of the country 1,687,057 tons, the Corporation’s increase in shipments accounting for approximately 75 per cent. of the total gain shown by the United States.

During the years of the World War the country’s annual exportations of iron and steel products were greatly increased as compared with the largest pre-war year. During the same period the Corporation’s exports were only slightly increased. The reason for this was that the Corporation’s operations were largely confined to commercial products and not to war munitions. Large quantities of steel were, however, produced and delivered to the government and to government agencies for use in the manufacture of munitions and for other purposes in carrying on the war.

Government records show that the exports of the United States in 1900, the year before the Corporation was organized, were 1,154,284 tons, and in 1901, 942,689 tons, these figures falling to 372,399 tons in 1902, and 326,590 tons in 1903. Hence, it has been urged that the immediate effect of the Corporation’s organization was adverse to exports. But the government figures include a large number of items such as subsidiaries of the Corporation do not manufacture, or such as they do not now export—for instance, many articles manufactured of steel, and steel scrap. As a matter of fact, the companies merged into the Corporation exported 291,000 tons of steel products in 1901. In the following year, the big company shipped more than 300,000 net tons.

To-day the Corporation’s products and agents penetrate into almost every part of the known globe. Its ships plow nearly every sea. The goods it sells to the world range all the way from wire nails and watch springs to the steel frames for great buildings. In Buenos Aires, for instance, the Corporation maintains its own force of erectors, and nearly all the big modern buildings of the Argentine capital have had their skeletons put together by the “Steel Trust” riggers, the men whom Farrell once described as working with one hand for their job and holding their lives in the other. The bulk of the steel used in the construction of the Panama Canal, about 175,000 tons, was supplied by subsidiaries of the great company.

Some of the principal markets for United States Steel’s surplus output, with the products they take are: Iceland, wire products and structural steel; Java, Sumatra, and Borneo, oil piping and galvanized sheets; India, sheets and wire products; Argentina, structural and merchant products; South Africa, pipe and light rails for use in diamond mines; Pacific coast countries of South America, roofing material, wire, rails, etc.; Patagonia, railway material; Canada and Mexico, practically every product made; Northern Africa, wire and sheets; Egypt, wire and cotton ties; Australia, a general line; the countries formerly comprising the Austrian empire, wire goods and pipe; Syria and the Holy Land, wire fence, pipe, and small nails used in putting together date boxes; Rangoon, pipe, nails, fence, and sheets; West Indies, a general line; Rumania, oil pipe; Central America, a general line; Greece, pipe, wire, sheets, etc.

China has for years been an important consumer of American steel. Her takings cover many lines and include bridge material, pipe, sheets for roofing as well as for making stove-pipes; tin plate used in making containers of egg yolk, which she ships principally to the United States, wire goods of various kinds, nails, including an extremely small type used in making bamboo furniture. In addition, owing to her low labor costs, China is a great market for scrap steel, such as defective wire rods, wire shorts and seconds, bar ends and plate cuttings, which are worked by hand into all sorts of implements. The patient and industrious Celestial even finds use for old horseshoes, which he makes into razors.

The Corporation has thirty-six foreign offices, located in Argentina, Australia, Belgium, Brazil, British India, Canada, Chile, China, Cuba, France, Holland, Italy, Japan, Java, Mexico, Norway, Peru, Russia, Spain, South Africa, and the United Kingdom. In addition to these, it has one hundred and thirty-six distributors located in forty-four foreign countries.

Although the Steel Products Co. avails itself of the facilities for shipping offered by the many steamship lines plying between America and foreign ports, the enormous expansion of its export trade has forced it to establish and maintain a large ocean-going fleet of its own. Formerly, the greater part of this fleet was chartered, but now the Corporation owns twenty vessels, and has only a few others chartered. These vessels carry its products all over the world, touching at many little-known ports and harbors, the waters of which are never disturbed by the prows of regular liners. At these places they put off loads of rails, tools, and diversified products, instruments with which pioneers, like railway builders, are extending the marts of civilization into untrodden lands.

All of the owned vessels fly the Stars and Stripes, those built in foreign countries having been transferred to American registry immediately upon the passage of the Ship Registry Bill, in 1914.

Most of the ships owned by the Corporation were built at its own plants in New Jersey and Alabama. The Federal Shipbuilding Co., the Corporation’s shipbuilding subsidiary near New York, has supplied it, so far, with nine vessels, each ranging from 3,450 to 3,821 tons net register. The Chickasaw Shipbuilding & Car Co. is responsible for the construction of four others, the largest of which, and the largest boat owned by the Corporation, is 4,045 tons net register on about 10,000 dead weight. The other seven vessels were purchased. At the time of writing the Corporation has under construction fourteen other vessels, all of which will be added to its fleet when finished.

Two of the Corporation’s boats were lost during the war, one a victim to a German submarine and the other running aground off the Chilean coast early in 1918.

No less than fourteen different steamship lines are operated by the Steel Products Co., which through them handles its fleet. These lines are: Isthmian Steamship Line; New York and South America Line (to Chile and Peru); Pacific Coast Service (to Pacific coast, United States, and Canada); New York-Far East; New York-Rotterdam Service; New York-Mediterranean Service; Gulf-Rotterdam Service; Gulf-River Plate Service; Gulf-India Service; Gulf-Scandinavia Service; Pacific Coast, United Kingdom & Continent Service; Norton Line (New York to River Plate); United States and Brazil Steamship Line; Panama-Far East Line.

The shipping of steel to certain points lacking a regular service often makes necessary the employment of expedients to reduce the attendant costs. For instance, prior to the opening of the Panama Canal, a fleet of six vessels was engaged in the trade with the east and west coasts of South America. These vessels sailing from the Atlantic seaboard made calls at various points in Argentina, Chile, Peru, and thence to British Columbia, where they found themselves empty and without opportunity for picking up a cargo for the return trip. The expense of the long journey in ballast round the Strait of Magellan home was prohibitive, so these vessels usually made trips to French or English ports, carrying general merchandise, making the shorter trip across the Atlantic to their home port under ballast, or with a cargo if it was possible to get one. Such a voyage would cover 35,000 to 40,000 miles and take about nine months. The opening of the Panama Canal, however, has changed the conditions that made this necessary.

The shipping of steel to the less-known parts of the world involves difficulties never encountered in the home market. The men in charge of exports must be men of initiative, accustomed to overcoming handicaps as they arise and to deliver the goods without the aid of the efficient methods of civilization.

On one occasion a special order for a number of boilers took one of the Corporation’s vessels to a harbor on the west coast of South America where the arrival of a steamer was a rarity, and facilities for landing cargo were conspicuous by their absence. The lack of hoists or any other method for lifting the boilers ashore was easily overcome, however. The crew of the ship was ordered to plug up the boilers at both ends and hoist them overboard, floating them on the waves to the sandy beach.

But this novel method of delivery created a dearth of labor in the vicinity. The natives, at the sight of the huge steel cylinders leaping from the waves and rushing ashore on the tide, decided that they were strange and fearsome monsters of the deep and they fled in panic to the woods where they remained for several days before they could be induced to return and carry the boilers to their destination.

On another occasion similar difficulties were encountered, but the cargo in this case was one of steel rails for the first line ever built to Buenaventura, Colombia. The rails had to be unloaded separately and sent ashore one by one on the little native dugout canoes. It was only the skill of the natives in handling their frail barks with such unwieldy cargoes that prevented a large part of the shipment finding a resting place at the bottom of the harbor.

The American Bridge Co. has erected a number of bridges in the Far East. Some of these have been in the interior of China, where the rivers, subject to seasonal floods and periods of absolute dryness, provide the main highways for freight traffic. In such instances the steel for the bridges was hauled up the river beds during the dry seasons, and if the rains arrived before the destination was reached, the steel was simply left on the river bed until the subsidence of the flood permitted the resumption of the journey up-stream.

In developing its export trade the Steel Corporation has performed a real and important service to American commerce generally. To a great extent, shipping depends on the trend of “weight cargo,” and exports of other goods classed as “measured cargo” depend similarly on shipping facilities. By supplying the heavy cargo for numerous markets where American goods had never sold before the Corporation made it possible for manufacturers of many lighter products to develop business for themselves in these new markets. In other words, it blazed the way for American commerce as a whole. How great is the debt that American business generally owes to the Corporation, and to a less extent to the Standard Oil and International Harvester companies, is plain when it is realized that these three companies shipped for many years more than half the “weight cargo” leaving the shores of the United States.

One of the principal benefits of large exports is its effect on labor in the producing country. The Corporation’s effort has been to find a regular market in foreign countries for 20 per cent. of its total output. This level was never actually reached under normal conditions, although during the war exports did, at one period, run about 33 per cent. of total production for a time. Taking the year 1912, the record pre-war year for exports, as a representative period, we find that shipments to customers abroad represented nearly 18 per cent. of total finished steel delivered by the Corporation’s mills. As the “Steel Trust” in that year employed an average of 221,000 men, this meant that about 39,000 workers were busy on material destined for export and that $34,000,000, of the Corporation’s payroll of $190,000,000 was being paid to American labor by foreign consumers. In 1919, 16.5 per cent. of the total business was export and by the same analysis, foreign buyers paid American workmen in the Corporation’s plants more than $79,000,000 in wages.

In the final analysis, this figure will be increased, as the Corporation under normal conditions encourages and assists companies manufacturing its products into machinery, cars, locomotives, etc., to expand their exports, by giving price concessions on steel purchased for that purpose. This re-export business gives work to a substantial number of the Corporation’s employees.

The building up of the vast export sales organization maintained by the Corporation has been a Herculean task, but it has been well worth the effort. By establishing its name and its product all over the world the Corporation has not only added to its profits and to its markets but it has helped to relieve the pressure of over-production which the industry feels from time to time, and thus it has conferred a substantial benefit on the steel trade as a whole.

CHAPTER VII THE SPIRIT OF THE CORPORATION

To one interested in social and industrial questions a tour over the vast properties and plants of the United States Steel Corporation can hardly fail to be of great educational value. It has been the writer’s good fortune to be able to make such a tour on more than one occasion. He had expected to be, and was, impressed by the various processes whereby iron ore is converted into steel ingots and then into rails, tubes, structural shapes, plates, bars, wire, nails, tin plate, and other products; by the monster machines used for loading and unloading ore; the blowing furnaces, pools of molten metal; the great rolls through which the red-hot steel is passed on its way to becoming a finished article of commerce; the mining of coal from the bowels of the earth, and the thousand and one other sights of what is probably the most spectacular of all industries.

But the more lasting impression was made not by the mechanical apparatus but by the human factor, the manner in which the vast human machinery that makes the Corporation was handled; the organization that made it possible for an army of more than a quarter of a million men to work in complete harmony and to a single end. In a word, the spirit of the Corporation.

As one becomes more and more familiar with the great company’s activities at first hand, more and more does it become plain that the entire organization is permeated with this spirit. From Judge Gary, its chairman and chief executive, and James A. Farrell, its president, who directs the manufacturing and commercial operations, down through the heads of the various constituent companies, and so through the subordinate officials, through those whom we may call the non-commissioned officers of the steel army, the foremen and mine captains, and finally among the men, both skilled workers and common laborers, there is evidence nearly everywhere of a universal sentiment of loyalty, of personal interest in the fortunes of the big company and of the will, on the part of each man, to give the best in him for the general result.

The above statement was originally penned six or seven years ago, after the writer’s first tour of the Corporation’s plants. Since that time the world has seen a general upheaval of labor. The Corporation itself has had to fight a great strike, and it would therefore be natural to suppose that the spirit of the Corporation had been adversely influenced during these trying years, but a recent visit to the Corporation’s plants did not bear out such a presumption. Rather, it left the impression that in spite of general labor unrest and notwithstanding the efforts of labor leaders to destroy it, the spirit of loyalty and coöperation is still strong in the great mass of the workers.

What is the reason for this spirit? How had it been possible to leaven with it so great a mass of men of different nationalities and varying degrees of intelligence? An excellent answer to these questions was furnished by one of the men, not one of the executives or operating heads, but one of the rank and file. He said:

“In the Steel Corporation the man who gives gets. Question those who are in the higher positions, who are drawing big salaries, and you will find that they all worked their own way from the bottom. Several of the men holding important jobs, now my bosses, I knew when they held little ones, and in every case I was satisfied that the advancement they got they fully deserved. I don’t believe that there is a single official of the Corporation, or of any of its subsidiary companies, who got his job through pull. Hard work is the only key to success with us, and it is a sure one. In brief, I feel bound to give this Corporation a square deal because I know that it will give me a square deal.”

A square deal—that is the secret of the Corporation’s spirit. The desire for justice, for fair and full recognition of fair and full service, is deep grounded in every man, and the management of United States Steel, by giving each worker the assurance that he will get just what is his due, has secured for itself the entire coöperation of most of its employees and has, as a result, an organization that probably could not be equalled elsewhere in the industrial world.

The Steel Corporation is a true democracy. No position in it, however high or responsible, is beyond the reach of any employee who proves his ability to handle the job. Farrell, now president, started as a laborer in a wire mill. The late Thomas Lynch, for many years head of the Frick Coke Co., handled a pick in the coal mines of that concern. Charles M. Schwab and William Ellis Corey, two former presidents of the Corporation, both started from the very bottom, as did Alvah C. Dinkey, one-time head of the Carnegie company, and a number of others. Even Gary, although he did not become connected with the steel industry until in middle life and after he had made a marked success in the legal field, was not the son of a wealthy man, and won his way to fortune by hard work combined with unusual business ability. There is no open sesame to honor and advancement in the big company, nor for that matter in the steel trade as a whole; the keys to success are ability plus energy.

“Nor could it be otherwise,” said one of the men who had himself climbed the ladder; “in steel making harmonious team work is essential to good results, and the natural leader rises to the top by the general recognition of his fellows.”

Efficiency, that supreme factor in large output and big profits, has become a fetish in industry in recent years. In its final analysis, “The Spirit of the United States Steel Corporation” is efficiency, not applied merely to the mechanical processes of manufacturing, but to the human element behind these processes; the efficiency that abides in a healthy, well-housed, and contented workman.

The Corporation has always taken a keen interest in matters affecting conditions of labor. It has lent its influence, its money, and the time of its officials to better these conditions, to provide more attractive homes and more sanitary and healthful conditions for its men, better educational facilities for their children, and wholesome amusement for all. For itself, the big company expects the benefit from the resultant increased efficiency and loyalty. For the worker, the most important gain is added self-respect.

George G. Crawford, president of the Tennessee Coal, Iron & Railroad Co., says on this point: “Summed up, the end of all social betterment work is the inculcation of self-respect. The worker possessing this attribute is worth more to himself, to his employer, and to society generally, than the man lacking it. Without self-respect, he remains a common drudge, his value at best stationary, but more likely receding. With it comes ambition and energy, and it is only the short-sighted employer who does not set high store on these qualities and encourage their growth. The lowest kind of labor is always to be had, but the men with ambition and the will to make good that ambition, the men of real value to themselves, are not so easy to find—and they are many times more necessary!”

Mr. Crawford pointed out that many young men who might be marked out for advancement in the steel industry, where their energy and ability would be quickly recognized and rewarded, prefer to go into offices or stores as clerks, although the field of advancement there is much smaller because natural conditions in a steel mill or coal mine, unless mitigated by the efforts of the employer, were such as to injure their self-respect. By surrounding living conditions in the industry with those things that make for clean, decent manhood such men would be attracted and the employing corporation would thereby open to itself new fields for recruiting to its organization the highest type of men.

The work done by the Corporation in making conditions at its plants more safe and sanitary, in endeavoring to improve home conditions among its workers, in providing better educational facilities for their children, and so on, will be detailed in another chapter. Any official of the Corporation or of such concerns as have worked along similar lines will tell you that the installation of these helps to better living is plain, practical business. That the gain in efficiency pays many times over the outlay involved. They studiously deny altruistic motives. But the observer who has an opportunity to become familiar with their activities can hardly help arriving at the conclusion that the men who engage in this work for the improvement of working conditions usually become engrossed in it for its own sake. That the human side of the work, deny it as they will, eventually and inevitably comes to occupy the chief place in their minds.

“Drawing” Bee-hive Coke Ovens

Under the Corporation’s stock subscription plan many thousands of employees have become stockholders of the great company. It has been suggested by those who see nothing but menace to the workers in every action of a big corporate enterprise, by those to whom the very word “corporation” is anathema, that this plan had for its real object the subjugation of the worker by inducing him to invest part of his wages in the securities of the employing company and then demanding from him unswerving obedience; enslaving him by holding over his head the fear of the loss of his investment. It has been claimed that the plan was a master stroke to give the Corporation the whip hand in the event of a strike. It is, of course, impossible to argue motives, but the plain facts are that the plan has not worked out this way.

“Pushing” Coke in By-Product Oven

The Other Side—Coke Falling into Car

Two Views of Modern By-Product Oven

Far from instilling the spirit of fear into the men, it is noticeable that stockholding employees regard themselves, and rightly, as owners in the vast enterprise of which they are a part, that they feel a genuine interest in its welfare and work wholeheartedly to further its interests. They take a pride in the Corporation that is very real and apparent and it is not strange that this should be so. If the Corporation designs to make its workers subservient it is ipso facto defeating another great end it is unquestionably striving for—efficiency. Because self-respect and servility are implacable enemies and cannot exist together.

The offering of stock to employees on attractive terms is merely another efficiency measure. Each employee who is a part owner in the business works for more than his wage. “His heart is in his work and the heart giveth grace to every task.” Moreover, the plan encourages thrift, and every employer knows that a thrifty worker is more reliable than his spendthrift brother, less prone to the inefficiency induced by financial worries. Finally, the having of a stake in industry and through it, in the country’s prosperity, makes a man a better citizen and increases his independence and self-respect.

If the subject of self-respect appears to be harped on to some extent, it is because it is of paramount importance, its influence affecting not only the worker and his employer, but the whole community. If the writer were asked to sum up in a few words what the Steel Corporation has done for industry, these words would be: It has exerted an enormous influence in helping the worker, the common laborer, to become a self-respecting citizen.

The tangible gain to the Corporation has been enormous. The intangible gain, although it cannot be measured, has almost certainly been many times as great. The management of the big company realized that the workers’ rights to a decent life were fully as important as the rights of capital, and that more, both in mental satisfaction and in profit, was to be gained from a recognition of these rights than from their denial. Perhaps, too, it saw that sooner or later the day would dawn when the worker with his hands would demand fair treatment, and it had the foresight and the courage to hasten the dawn of that day.

In the matter of wages the Corporation’s course has been in entire harmony with its general policy toward the worker. Since its organization in 1901 it has many times, and always voluntarily, increased wage rates, and in doing so it has set a lead which other steel companies have found themselves forced to follow. Only once has it ever reduced wages and then but a small amount and only after the dividend on the common stock had been eliminated. The wages were soon restored and frequently thereafter advanced. Its principle has been that capital and labor both have important rights in the financial results of industry, but that labor is perhaps more directly concerned and should therefore be the last to suffer in times of stress.

Since 1901 the average wage rate of the steel worker has been increased approximately 237 per cent. and this increase has been due almost entirely to the Corporation’s stand on this question. Any one who doubts this has but to ask the competitors of the big company to be convinced. In 1911, when steel prices were at an unprofitable level and business was slack, the heads of more than one independent company expressed the opinion that a reduction in wages, what they called the liquidation of labor, was necessary, even imperative, but that they were restrained from attempting this liquidation while the Steel Corporation continued to pay its men the old rate. They said in effect: “The United States Steel Corporation boosted wages to the present high level. Let it take the lead in lowering them.” But the Corporation refused. Instead, with the first signs of an improvement in business, it gave wages another boost. Again in 1914, in the face of the worst period of depression in years, and with world industry demoralized as a result of the outbreak of the European war, and in spite of the fact that the Corporation had been compelled to forego the payment of the dividend on its junior stock and was not fully earning its preferred dividend, its management refused to let the worker suffer. So strong was the sentiment throughout the trade at this time in favor of the liquidation of labor that a wage cut was looked on as not only justified, but inevitable, and it is generally understood that even in the Corporation it was only the insistence of Judge Gary that prevented its occurrence.

At the present writing, world industry is going through a process of deflation from the high prices induced by the war. In some instances the effect is already visible on labor. Cotton mill workers in some parts of New England have themselves suggested a decrease in pay to keep the wheels of industry running. In the steel trade costs are admittedly high and wages constitute the chief factor in costs. But if one may conclude from Judge Gary’s public utterances in recent months the thought of reducing wages at present is far from the mind of the Corporation’s management. A liquidation of labor may occur later, but if it does, it is a reasonable assumption that, so far as the Steel Corporation is concerned, it will not take place until living costs have been at least sufficiently deflated to make the new real wage of the worker as distinct from his money wage, at least as high as it is to-day.

Average wages paid by the Steel Corporation to its employees during the past eighteen years have been as follows:

1902 $716.88

1903 720.08

1904 677.18

1905 710.78

1906 729.86

1907 765.18

1908 729.44

1909 775.77

1910 800.95

1911 819.85

1912 856.70

1913 909.50

1914 905.36

1915 925.06

1916 1,042.41

1917 1,295.87

1918 1,684.58

1919 1,902.13

1920 (partly estimated) 2,169.00

Although the average wage in 1914 was some four dollars less than in 1913, the average day wage to the worker, exclusive of the administrative and selling cost, was $2.88, compared with $2.85 the previous year. This is significant as indicating the policy of the Corporation to equalize as much as possible the amounts paid to different classes of workers. In instituting advances, it has always been the lowest classes of labor that have benefited most. The workers themselves have testified to satisfaction with this policy and their recognition of its essential justice.

The Steel Corporation has been subjected to occasional attacks because of its attitude toward labor unions. It neither encourages nor approves unionism. It does not contract with unions as such. It stands for the open shop. As it is plain that this biggest of all employers has not sought to crush the worker, that it has, in fact, done much to make his lot better and brighter, the question may fairly be asked why it is opposed to dealing with organized labor.

The reason is not far to seek. Unionism is opposed to efficiency, it destroys the esprit de corps that is so important in getting the best results from a large body of men. It prevents promotion according to merit. In its very essence it is antagonistic to the employer; it sets labor and capital into two distinct and constantly armed camps; it would make war between capital and labor. And the management of the Corporation believes that the only workable solution of the whole industrial problem is to bring labor and capital into friendly coöperation, to give labor a part in the earnings of industry, making the interests common.

This cannot be accomplished in a hurry. A movement of so vast a magnitude must necessarily take time. But had the Corporation’s employees been organized it is doubtful if the betterment of conditions of its workers, and consequently of the steel workers of the country, would have progressed as rapidly as it has.

The labor union, if used to help the oppressed worker, is unquestionably a beneficial factor in industry. Used as it too often is, to promote the selfish interests of its leaders, and to impinge upon the rights of the public at large, it is just as surely a great evil. The logical result of union labor as preached by its principal exponents is to cripple initiative, and to oppress the worker who prefers to stand on his own feet. And, in America at least, the majority of the workers are of this independent type. And in maintaining its policy of the open shop the Corporation has been fighting the battles of this class of workers.

The writer has tried to show that loyalty and coöperation permeate the United States Steel Corporation. That it is the result of the endeavor on the part of the big company to give to the men who make up its organization absolute justice, the square deal; its effort to make the worker, even the poorest, an independent, self-respecting citizen, and to give to every man in its mines, mills, offices, etc., an opportunity to share in the profit derived partly from his efforts. All this to promote efficiency, the “spirit of the Corporation,” to increase the value of the worker to himself, to his employer, and to the community. He believes that the facts justify the statement made in an earlier chapter that the organization of the United States Steel Corporation was the greatest step that has ever been made toward the highest form of socialism.

CHAPTER VIII THE CORPORATION’S IMPLEMENTS

We live to-day in the “Age of Steel.” The metal probably plays a more important part in our civilization than any other product made by the hands of man. Our big buildings, our navies (both war and merchant), our trains and the rails they run on, machinery of all kinds, tools for every trade—all steel. Furniture, watch springs, even wire hair for stuffing mattresses and other uses—steel again. And new uses for the metal are being discovered almost every day.

It is difficult to realize that the age of steel is hardly more than half a century old. But fifty years ago steel, commercially, was still something of an experiment, struggling against iron for its place in the sun. At that time the head of one of the greatest railroad systems of America dismissed a persistent salesman who had been trying to secure his order for steel rails, with the exclamation: “Steel rails? Bosh! Stuff! Nonsense!” To-day that line has many thousand miles of track and every rail in it is steel. Not two generations ago engineers viewed askance the plans of the designer of the first skyscraper. They regarded as absurd the proposal to build “a steel bridge up into the air.” To-day the Woolworth Building towers nearly eight hundred feet above the pavement of Broadway.

From the day when steel was made “by the spoonful” to the present, when the great “Steel Trust,” with its thirty-eight Bessemer converters and 334 open-hearth furnaces, is capable of producing some 65,000 tons every twenty-four hours, is a far cry reckoned in terms of industrial development short as the reckoning may be in years. The pioneers of steel never dreamed of the enormous proportions to which the industry would grow, the innumerable uses to which the metal would be put.

What is steel? Iron that has been refined and hardened by processes in which heat plays the most important part.

Iron ore is found in large quantities in many parts of the world. Sometimes it is loose, like earth, and again it is a rocky formation. Its color also varies, some ores being red, others yellow, and so on through various shades and tints. But the pure metal is white and, strange as it may seem, quite soft. Cleansed of its impurities, and hardened by a mixture of carbon and other ingredients, it becomes one of the hardest of metals.

Iron, apparently, is common to all the planets. Meteorites usually contain a large percentage of it. So general is its distribution on this planet that a theory has been advanced that the globe on which we live is nothing but a vast mass of iron thinly incrusted with rock and earth, and that the deposits found near the surface are merely the outcropping of this inexhaustible mine.

The Western Hemisphere is particularly favored in regard to deposits of iron. Immense ore bodies exist in the United States and Canada, Chile, Brazil, Cuba, and other parts. Of the known ore beds in this country, the most important lie around Lake Superior. Near this great inland sea there are no less than six different ore ranges, the Mesaba, Vermilion, Marquette, Gogebic, Menominee, and Cuyuna. Of these the Mesaba is the largest, richest, and most easily worked and from it is taken a material portion of all the ore mined in the United States. There are ore bodies of considerable size in Alabama, New York, New Jersey, Pennsylvania, Colorado, Wyoming, New Mexico, and Utah, and another large deposit is now reported to have been discovered in Oregon.

Некоторые американские производители стали импортируют часть используемой ими руды из Швеции, Кубы, Испании и Чили. Однако дочерние компании Сталелитейной корпорации до сих пор зависели от поставок руды из озерных регионов, за исключением Угольной, железорудной и железнодорожной компании Теннесси, которая использует руду из Алабамы.

Хотя железо в Америке стали выплавлять задолго до Войны за независимость, об огромных месторождениях в районе Великих озер ничего не было известно до 1845 года. В том году индейцы привели Фило М. Эверетта к «горе чистого железа», которой он дал имя великого миссионера и первопроходца Маркетта. Вскоре после этого землемер по фамилии Станц отправился на поиски золота в дикий регион к северу от Верхнего озера и вернулся в цивилизованный мир с рассказами об огромных месторождениях железа в районе, ныне известном как гряда Вермилион. Но эти месторождения находились так далеко и добраться до них было так трудно, что лишь в начале семидесятых годов капитал в лице покойного Шарлеманя Тауэра смог заинтересоваться их разработкой.